Exclusive! GAIL to announce buyback offer

Government owned Gas Authority of India Ltd will soon come up with a buyback offer, Sources said. GAIL will be contributing to the Government's disinvestment target. GAIL is likely to announce the buyback at a price range of Rs 120 to Rs 130 per share which is at a premium of 20% to 30%. Sources said that since GAIL has a good track record of commissioning projects and the company will be able to maintain its track record. For its buyback the company can use free reserves or net cash. GAIL's reserves and surplus as of FY19-20 was Rs 37,500 crores.

The net cash as of September 2020 was Rs 3000 Crores. Sources also said that GAIL would convene a board meeting to take up the proposal. A buyback happens when the issuing company pays shareholders the market value per share and then re-absorbs that portion of its ownership that was previously distributed among public and private Investors.

GAIL (India) Limited recorded 13% increase in Turnover to Rs. 13,611 crore vis-a-vis Rs. 12,060 crore in Q1 FY21 while Profit before Tax (PBT) increased to Rs. 1,551 crore as against Rs. 356 crore in Q1 FY21. The Profit after Tax (PAT) increased to Rs. 1,239 crore in Q2 vis-a-vis Rs. 256 crore in Q1 FY21. Mr. Manoj Jain, Chairman & Managing Director, GAIL said that the company’s plants and pipelines have achieved pre-COVID level of performance.

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He further added that though the Capex during the 1st quarter was affected due to lockdown, GAIL has moved swiftly to make up for the lost time and is trying to accelerate the progress in its ongoing projects.